Financial Data and Key Metrics Changes - Kimbell Royalty Partners reported record revenues for oil, natural gas, and NGL totaling $90 million for Q1 2025, marking a new record for the company [10] - Consolidated adjusted EBITDA reached $75.5 million, also a new record, reflecting strong operational performance [10] - The company declared a cash distribution of $0.47 per common unit, an increase of 17.5% from Q4 2024, with approximately 70% of this distribution expected to be considered a return of capital [7][11] Business Line Data and Key Metrics Changes - The company achieved a first quarter run rate production of 25,841 BOE per day, including contributions from acquired production [10] - General and administrative expenses for Q1 were $9.6 million, with cash G&A expenses at $2.52 per BOE [10] Market Data and Key Metrics Changes - Kimbell Royalty Partners maintained a market share of approximately 16% of all rigs drilling in the Lower 48 states, with 90 rigs actively drilling on its acreage [6][10] - The company noted strong permitting activity, including the permitting of 17 additional wells in Martin County, Texas, demonstrating the strength of its diversified asset portfolio [6] Company Strategy and Development Direction - The company aims to continue its role as a major consolidator in the U.S. oil and natural gas royalty sector, which is estimated to be over $700 billion in size [15] - Kimbell Royalty Partners plans to maintain a conservative balance sheet with a target net debt to EBITDA ratio of approximately 1.5 times, while continuing to pursue M&A opportunities [26][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving its goals for 2025 despite current economic volatility and uncertainty impacting commodity prices [7][14] - The company highlighted that its diversified portfolio and low PDP decline rate position it well to outperform many competitors in the upstream space [27] Other Important Information - The company increased its borrowing base and elected commitments on its credit facility from $550 million to $625 million as of May 1, 2025 [5][12] - Kimbell Royalty Partners redeemed 50% of its Series A cumulative convertible preferred units on May 7, 2025, simplifying its capital structure and reducing its cost of capital [5][13] Q&A Session Summary Question: Interest in M&A activity - Management acknowledged ongoing interest in M&A opportunities, particularly in the natural gas sector, despite challenges in transacting due to high valuations [20][22] Question: Target debt levels and leverage management - The company aims to maintain leverage at approximately 1.5 times EBITDA while continuing to pay down debt and redeem preferred units periodically [26][51] Question: Trends in production volumes - Management reaffirmed guidance for 2025, indicating no current evidence of a slowdown in drilling activity, with strong lease bonus payments expected [44][68] Question: Tax structure and distribution runway - The company has a considerable tax shield, allowing for a significant portion of distributions to be classified as return of capital, with no near-term end to this advantage anticipated [45][46] Question: NGL and natural gas realizations - Management noted stronger than expected realizations for NGL and natural gas, attributing improvements across the entire portfolio [62] Question: Update on net DUCs - The company reported 4.67 net DUCs at the end of Q1, with no significant trends indicating a slowdown in activity [65][67]

Financial Data and Key Metrics Changes - The company reported record revenues for oil, natural gas, and NGL totaling $90 million for Q1 2025, which includes contributions from acquired production [10] - Consolidated adjusted EBITDA reached a new record of $75.5 million for the quarter [10] - The cash distribution for Q1 2025 was declared at $0.47 per common unit, reflecting a 17.5% increase from Q4 2024 [7][11] Business Line Data and Key Metrics Changes - The company achieved a first quarter run rate production of 25,841 BOE per day, including contributions from acquired production [10] - General and administrative expenses for Q1 were reported at $9.6 million, with cash G&A expenses at $2.52 per BOE [10] Market Data and Key Metrics Changes - The company maintained a market share of approximately 16% of all rigs drilling in the Lower 48 states, with 90 rigs actively drilling on its acreage [5][10] - The company noted strong permitting activity, including the recent permitting of 17 additional wells in Martin County, Texas [5] Company Strategy and Development Direction - The company aims to continue its role as a major consolidator in the U.S. oil and natural gas royalty sector, which is estimated to be over $700 billion in size [14] - The company plans to maintain a conservative balance sheet and leverage ratio of approximately 1.5 times EBITDA while pursuing M&A opportunities [24][50] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals despite broader economic volatility and its impact on commodity prices [7][14] - The company highlighted a strong production profile and ongoing acquisition activity as key factors for future growth [14][29] Other Important Information - The company increased its borrowing base from $550 million to $625 million on May 1, 2025, and redeemed 50% of the Series A cumulative convertible preferred units on May 7, 2025 [4][12] Q&A Session Summary Question: Interest in M&A activity - Management acknowledged ongoing interest in M&A opportunities but noted challenges in transacting on natural gas deals due to competitive pricing [20][21] Question: Debt management and targets - The company aims to maintain a leverage ratio of approximately 1.5 times and plans to continue paying down debt while managing its capital structure [24][50] Question: Natural gas hedging strategy - Management stated that they are comfortable with a 20% hedging level, which they believe protects against price volatility while maintaining flexibility [34][36] Question: Production trends and guidance - Management reaffirmed guidance for 2025, indicating no current evidence of a slowdown in drilling activity [41][43] Question: Tax structure and distribution runway - The company has a considerable tax shield, allowing for a significant portion of distributions to be classified as return of capital, enhancing after-tax returns for unitholders [44][45] Question: Long-term capital structure and preferred units - Management plans to continue paying down debt and redeeming preferred units periodically while maintaining a conservative leverage ratio [50][52]

Financial Data and Key Metrics Changes - The company reported a consolidated adjusted EBITDA growth of 26%, outpacing a 12% revenue growth in the first quarter of 2025, with a margin expansion of 190 basis points [6][21] - The net debt to adjusted EBITDA ratio was maintained at 2.9 times, with expectations to reduce leverage to a target of 2 to 2.5 times over the next twelve months [7][19] Business Line Data and Key Metrics Changes - **Construction Products**: Revenues increased by 5%, driven by the Stabola acquisition, but organic revenues declined by 6% due to lower freight revenues and divestitures [11][12] - **Engineered Structures**: Revenues increased by 23%, largely due to higher wind tower volumes and the inorganic impact from the Amaron acquisition, with adjusted segment EBITDA increasing by 90% [15][16] - **Transportation Products**: Revenues were up 6%, with adjusted segment EBITDA increasing by 13%, driven by higher tank barge volumes [17] Market Data and Key Metrics Changes - The aggregates business represented 69% of construction materials revenues, with average organic pricing up 7% year-over-year and total pricing up 10% due to the Stabola acquisition [10][12] - The company expects continued investment in U.S. infrastructure to benefit operations, with strong demand conditions in various end markets [8][9] Company Strategy and Development Direction - The company is focused on executing its strategic vision, with a commitment to reducing leverage and enhancing operational efficiency [5][7] - The integration of the Stabola acquisition is expected to contribute positively in the second quarter, with a strong outlook for construction products and engineered structures [20][23] - The company anticipates sustained demand growth in utility structures due to increased electrification and renewable energy needs [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving macroeconomic environment, citing strong demand in most end markets and solid visibility from backlogs [8][9] - The company expects a strong 2025, reiterating full-year guidance with anticipated revenue of $2.9 billion and adjusted EBITDA of $570 million, reflecting a 17% and 30% increase, respectively [21][22] Other Important Information - The company reaffirmed its capital expenditure guidance of $145 to $165 million for the full year, with a focus on maintenance CapEx [20] - Free cash flow for the quarter was negative $30 million, but management expects improvement in the second half of the year [20] Q&A Session Summary Question: Can you elaborate on the wind tower contribution to sales and profit dollars in the quarter? - Management highlighted strong demand and volume growth in utility structures, with the wind tower facility ramping up effectively, contributing positively to margins [36][38] Question: What are the expectations for the construction products business moving forward? - Management indicated no surprises in the Stabola operations, with good demand and orders expected to improve significantly in the second quarter [66][71] Question: How is the company managing pricing versus volume declines in aggregates? - The company is focusing on margin rather than volume, with local decision-making to balance cost absorption and pricing strategies [92][93] Question: What is the outlook for the housing market and its impact on the business? - Management expects stabilization and a potential recovery in the housing market in the second half of the year, although not a booming market [104][105]

Financial Data and Key Metrics Changes - The company is pleased with its performance, particularly in the integration of Uinta Basin assets, projecting a 30% increase in oil production and a 20% increase in total production for 2025 [6]. Business Line Data and Key Metrics Changes - The company anticipates a modest increase in production rates from Q1 to Q2, with a significant increase expected in Q3, driven by more Uinta wells coming online [10][11]. Market Data and Key Metrics Changes - The company is focused on maximizing sales to local Salt Lake City refineries, which typically account for 15% to 20% of crude sales, due to lower transportation costs [42]. Company Strategy and Development Direction - The company is prioritizing debt reduction to achieve a leverage ratio of one times, with a disciplined approach to allocating free cash flow [12][13]. - The company is not providing specific guidance on rig plans but will drop rigs based on program needs, emphasizing production timelines over rig counts [28]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Uinta Basin assets, noting that they have exceeded expectations and that the company is focused on optimizing drilling and completion designs for future operations [36][37]. - The company is modeling various scenarios for 2026 based on commodity prices and cost environments, indicating flexibility in operational plans [51][52]. Other Important Information - The company has filed its first quarter 10-Q and is committed to transparency regarding forward-looking statements and non-GAAP measures [4]. Q&A Session Summary Question: Clarification on oil production and guidance for 2025 - Management confirmed no material changes to the full year plan, with an expected increase in oil cut from Q1 to Q2 and a major increase in Q3 [9][10]. Question: Cash returns and share repurchases - Management indicated a focus on debt reduction over share repurchases, although they remain open to supporting the stock if necessary [12][13]. Question: Uinta Basin productivity and co-development expectations - Management stated that 90% of their program focuses on the lower cube, with confidence in achieving forecasted results [19]. Question: LOE impacts and cost expectations - Management noted that some cost increases are expected to be one-time, while others may persist, but all have been included in the adjusted full year guidance [22]. Question: Rig count and capital allocation - Management clarified that while they are reducing rig counts, they do not foresee immediate changes in capital allocation based on current commodity prices [32][34]. Question: Oil sales to local refineries - Management confirmed that they aim to maximize sales to local refineries due to lower transportation costs, with no specific contracts governing the split [42][43]. Question: Production sales and revenue recognition - Management explained that there will always be slight lags between production and sales due to transportation timing, but this is expected to be a consistent discrepancy [65].